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Box D: The new employment tax

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  • Mortimer-Lee, Paul

Abstract

In September, the government announced a new Health and Social Care Levy: initially a surcharge on existing National Insurance contributions, but with an extension to dividends. The levy will be 1.25 per cent on employee NICs and 1.25 per cent on employers, in total it is expected to raise some U+00A314 billion per year, though there will be a refund of around U+00A32 billion to public sector employers to compensate them for their higher costs. The net increase in revenues, U+00A312 billion, is equivalent to about 0.6 per cent of Gross Domestic Product (GDP).

Suggested Citation

  • Mortimer-Lee, Paul, 2021. "Box D: The new employment tax," National Institute UK Economic Outlook, National Institute of Economic and Social Research, issue 4, pages 29-31.
    • Handle: RePEc:nsr:niesra:i:4:y:2021:p:29-31
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    File URL: https://www.niesr.ac.uk/wp-content/uploads/2021/11/UK-Economic-Outlook-Autumn-2021.pdf
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    References listed on IDEAS

    as
    1. François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(1), pages 77-106, April.
    2. Edouard Challe, 2020. "Uninsured Unemployment Risk and Optimal Monetary Policy in a Zero-Liquidity Economy," American Economic Journal: Macroeconomics, American Economic Association, vol. 12(2), pages 241-283, April.
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